Force Placed Insurance


Force-Placed Insurance Lawsuit Brought Against Bank of America

Force Placed Insurance Lawsuit Brought Against Bank of America

On March 28, 2014 Bank of America was hit with another class action on behalf of a nationwide group of borrowers who were subject to the bank’s force-placed insurance policies. The force-placed insurance lawsuit, filed in Federal Court in the Northern District of California alleges that Bank of America force-placed flood insurance policies on a San Jose, California woman's home, creating unnecessary and unwarranted coverage. In accordance with the terms of her mortgage and federal law, the plaintiff was forced... Read More

Force-Placed Insurance Settlement Against JPMorgan Approved

Force Placed Insurance Lawsuits

A federal judge in Miami has approved settlement of a class-action lawsuit against JPMorgan Chase for its force-placed insurance practices. The settlement provides class members with a 12.5% refund of the forced-place insurance premiums charged by Chase and Assurant, Inc.. While the settlement originally received the court’s preliminary approval back in October 2013, some homeowners objected to its terms.  In particular, homeowners argued that the claim form requirement under the settlement agreement was unfair because Chase retained the unilateral power to... Read More

New Notice Requirements for Force-Placed Insurance

Force-Placed Insurance Lawsuits

Effective January 10, 2014, mortgage servicers are required to provide substantial new notice to consumers before charging any fees for force-placed insurances.  The new notice requirements are designed to better inform consumers of their mortgage obligations and to help prevent unnecessary force-placed policies. Under the new rules, a mortgage servicer must provide consumers with at least two notices before force-placing an initial insurance policy and a subsequent renewal notice if applicable.  If the servicer fails to comply with the notice requirements,... Read More

New Rules Protect Consumers Against Excessive Force-Placed Insurance Fees

Force-Placed Flood Insurance Lawsuits Audet and Partners

New mortgage servicing rules enacted by the Consumer Financial Protection Bureau go into effect January 10, 2014 to protect consumers from widespread unfair practices related to force-placed mortgage hazard insurance.  Mortgage servicers will now be prohibited from charging excessive fees on force-placed policies. Here is an overview of two major substantive rules regarding force-placed insurance. Excessive Fees Limitations Since the financial crisis, the mortgage industry has reaped millions in profits from force-placing expensive insurance policies on unsuspecting borrowers when their own policies lapsed... Read More

Force-Placed Insurance Lawsuits Challenge Widespread Lender Practices

Force-Placed Flood Insurance Lawsuits

Major mortgage lenders are being sued for forcing homeowners into overpriced homeowners and hazard insurance when the borrowers own policies have lapsed.  JP Morgan recently settled a force-placed insurance lawsuit for $300 million. Force-Placed Insurance Overview What is force-placed insurance? Force-placed insurance is hazard insurance a mortgage servicer obtains on behalf of a borrower.  Essentially, when a borrower’s insurance policy lapses, whether due non-payment, simple error or otherwise, the mortgage lender will “force-place” a new policy on the property in order to protect... Read More